High interest rates. The deeper you bury yourself in credit debt, the more higher the interest rate will go. Not only that, but you will also be paying for other additional fees if you fail to pay your creditor/s on time. bad credit file scores tend to have higher interest rates to pay causing you to pay more than one normally would with a better credit score. If you have a high amount credit card balances or outstanding major loans, the cost will be higher.
Applying for insurances, loans, etc. will be difficult. Lenders and creditors alike sees bad credit file history a risk. It is most likely that your application will be denied. Why so? When you apply for a loan, insurance, credit card, cell phone contract and the like, they will ask for your credit file to review whether or not you’re responsible to pay.
The same goes with car insurances, you will be paying for a higher interest rate and APR compared with those who have a good credit history with the same vehicle as yours.
Starting a business. If you’re planning to start a business, brace yourself to be turned away and denied for a small business loan. Regardless of how ground-breaking your idea may be, if you have a damaged credit history, it might not launch the way you want it to be. Even if you get approved, chances are you’ll be paying a higher interest rate than the usual and there will be strict terms and conditions restricted to you.
Renting an apartment. So you have found an apartment that best fits your preferences and ‘budget’. Now, the landlord asks for your credit report and you know how daunting your file is. Landlords require their future tenants to show them a copy of their credit report. Why? Because tenants who fail to pay rent are headache to landlords. So, they ask those who wish to rent an apartment their credit reports to ensure that one can fulfill their financial obligations to them.
Employment opportunities. This may seem unlikely. In spite of that, hiring managers today go beyond your reviewing your resume and skill set. Aside from your social media activity, they now run credit checks as a factor in terms of hiring you. Although it’s true that only a few companies require this, it is crucial however in upper management jobs and in the finance industry. These companies likely prefer hiring those who has good credit reports.
In your situation, borrowing can be horrifyingly expensive and you don’t want to get in more debts, do you? Your credit issue is only a temporary problem, it can be fixed and it’s in your hands to repair it. If you don’t rebuild your credit as soon as you can and it’s already bad enough that you can’t get approved for a personal loan, maybe it’s time to seek help from credit repair services.
However, if you really are in need of a quick loan, there are lending services out there that can lend you a helping hand regardless of your financial situation. Although make sure to discuss your situation and discuss it further with your lender, they can stretch your options as long as you’re a responsible borrower.
About Author: Chie Suarez has spent time figuring out ways on saving money and other financial related concerns. She then became a writer for Speedy Money which offers hassle-free various online loan services.